Israel kept up its three-week offensive in the Gaza Strip overnight as warplanes bombed three tunnels it said were being used to channel weapons.
Wednesday's violence left nearly 80 wounded in Gaza
On Wednesday evening, a Palestinian died in an Israeli strike on Mughazi refugee camp in central Gaza - taking the day's death toll in Gaza to 10.
Israeli troops also arrested 12 wanted Palestinians in the West Bank.
Israel's campaign in Gaza began after Hamas militants captured Cpl Gilad Shalit in a cross-border raid.
It also aims to stop rocket attacks by Palestinian militants, who say such attacks are in retaliation for Israeli attacks on them.
The BBC's Alan Johnston in Mughazi said people were screaming in pain and horror after Israeli aircraft fired a missile into a street on the edge of the refugee camp.
One person was killed and 20 people were injured.
The Israelis said the Palestinians were armed.
The strike followed a day of sporadic fighting after Israeli ground troops moved across the border to seize ground around the camp in the early hours of Wednesday.
The Israeli army said the operation aimed "to target terror infrastructure" in the camp.
At least 10 Palestinians were killed and more than 80 wounded, hospital officials said. Five Israeli soldiers were also injured, the Israeli army said.
Meanwhile, five Palestinians were killed in an Israeli operation in the northern West Bank city of Nablus.
Soldiers, along with tanks and bulldozers, surrounded a security building in a bid to capture militants suspected of links with Hezbollah apparently hiding inside.
The Israeli army said 12 wanted Palestinians were arrested.